Gold & Silver Shorts Lose Money: You "Hate" to See It
GoldFix Drivers Update
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SECTIONS
Market Summary: weekly recap
Precious: analysis
Reports: research
Technicals: active trading levels
Tools: educational videos and research
Charts: related markets
Calendar: next week
REMEMBER BARRON’S?: The weekend report is intended to be more like a Sunday paper with different sections. Barron’s of old comes to mind. Best digested in sections between life’s responsibilities if you can. - VBL
1. Market Summary
Tapering turned out to be bullish. Or as we frequently see in efficient markets; Sell the rumor, buy the news. The Fed revealed its Taper this week and that turned into a reason to buy everything- including Gold. The stagflation trade has come full circle. Call it reflation now. Similar to the Covid recovery feeling.
Shorts were carried out on stretchers in several assets. Gold may have been one of them. Stock and bond squeezes occurred. Even the dollar ended higher on the week, but barely.
Three weeks ago markets were discounting inflation and recession. Bonds had signaled a recession from the tightening. Stocks were grinding lower.
Two weeks ago brought mixed signals, with Bonds continuing to discount recession, but stocks turning upward again assuming things would be fine.
This past week, we got full blown reflation behavior. Bonds rallied. Stocks rallied. Commodities rallied. Rallies even rallied. Oil gyrated to the tune of OPEC until The Fed. Then the reflation trade took over..so it too rallied.
The only thing that did not rally was Crypto. Bitcoin was down in its first week after the ETF parade. Here’s a run-down of the broader markets.
Sector Performance
Small Caps outperformed dramatically this week; best week since March. Nasdaq also surged with its biggest week since Feb up 5 straight weeks. The S&P and Dow also made gains on the week with record highs.
Tech and Consumer Discretionary outperformed this week- see 1 and 2
Healthcare and Financials ended the week lower - see 3 and 4
Semis soared this week (its best week in a year), up 7 days in a row- see 1
Pfizer’s COVID pill announcement slammed MRNA and MRK- see 3
TSLA is now larger than the entire S&P Energy
PTON collapsed on disappointing earnings and lowered guidance
Bonds
Bonds were strong all week in what is called a “bull steepening”. All interest rates declined, but short term rates declined more than long term ones. This partly undid the “bear flattening” we saw the last 2 weeks. Here is that graphic again for reference. This time the rate moves are in green.
GoldFix Friday WatchList
Complete Watchlist Here
Crypto Saturday Session
2. Precious- Shorts Were Doomed
Note: This week charts were just better aids for describing what happened. We don’t fancy ourselves as technicians. Hopefully it’s not as wonky as it may appear.
Apologies to our editor pictured above. In any event, we are available for questions on anything here. Cheers
The metals markets were shorted most of the week by small funds, CTAs, and prop desks front-running the GLD rotation trade. Frankly, the behavior was pretty obvious. Things unfolded in a way that made a lot of sense. The best trade was to stand pat with longs.